Ambuja Cement: Measuring the Value of Water
(8 pages of text)
In 2016, Ambuja Cements Limited (Ambuja Cement) was one of the largest cement companies in India. Company operations required the use of water for cooling, dust suppression, and domestic needs, but the use of water stressed the water resources at some of the company’s locations. Ambuja Cement thus identified the availability of water as a risk area for the organization and made water conservation a key element of their sustainability agenda. By virtue of its sustainability initiatives, Ambuja Cement became one of the first cement companies in the world to be certified as water positive. The company wanted to account for both the social and economic value its water conservation efforts generated. However, valuing water was a complex task involving many considerations, such as water sources and uses, the social value of water, water scarcity, and exchange rates.
This case is ideal for general management classes at the graduate level and gives students the opportunity to do the following:
- Understand the links between an organization’s business strategy and its social responsibilities.
- Assess the strengths and weaknesses of various measurement systems for evaluating total business value.
- Understand a company’s externalities and how they affect decision-making in corporate social responsibility (CSR) and sustainability activities.
- Illustrate a practical approach to the measurement of an externality.
India, Large, 2016
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